Shhhh ... What Couples Aren't Sharing About Their Stock Brokers

Shhhh ... What Couples Aren't Sharing About Their Stock Brokers
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By Kevin Voigt

When it comes to investing for retirement, one in five couples seem to be locked in a broken love triangle with their stock brokers, a recent NerdWallet/Harris survey found.

Of couples who have retirement savings, more than 20% don't know how much they have invested; an additional 21% said they don't share details about how they're saving in their long-term investments with their partner, according to the survey.

While we aim for discretion when it comes to cash, a successful investing relationship needs to be more of a ménage à trois with you, your partner and your stock broker. Openness is key for understanding what you and your partner want for retirement and where you are toward achieving those goals.

Sharing dream, ignoring reality
First, the really bad news: One in three Americans in a relationship reported that neither they nor their partner are saving for retirement, according to a Harris survey of 1,800 Americans who are married or living with a partner.

Three out of four of those surveyed who are saving for retirement have shared with their partner general retirement dreams -- what age they want to retire, where and how they will live. But nearly one-third (30%) said they don't talk with their partner about how much cash they'll need to achieve those dreams.

About one in five (21%) said they don't even have a ballpark estimate of how much their partner has saved for retirement, and 43% of respondents who have a brokerage account don't consult with their partner before making trades.

Savings account strategy?

Many of those who are saving for retirement appear to rely on conservative investments. Asked to select all that apply, the top pick (39%) was a workplace retirement plan, such as a 401(k) or 403(b) account. But the second-most-common choice (31%) for long-term investments was a bank savings account.

This can make it harder to accumulate wealth, because savings accounts come with ultra-low interest rates and none of the tax advantages of a 401(k) or individual retirement account, which 25% of Americans in a relationship have, according to the survey.

A couple that puts $5,000 a year into a Roth IRA earning a 5% annual return in the stock market would save $332,000 in 30 years. That's more than double the $152,000 they'd have if they squirreled away the same amount in a savings account with a 0.1% interest rate.

A plan for your future
Consider these simple guidelines for prioritizing your retirement investments:

  • Contribute to a workplace retirement account at least up to the full amount of the employer contribution.

  • Once you contribute enough to get the full employer match, open a brokerage account for a Roth or traditional IRA. These accounts offer tax benefits for those who qualify.
  • Use additional cash for more investments. Any cash you won't need in the next five to 10 years should be directed to a low-cost investment, like an index fund or exchange-traded fund. Find our top choices for online brokers.
  • If you want to calculate the true cost of retirement, the
    is a good way to get a clearer picture of where you are and where you need to go.

    While retirement can seem far away, a little effort now can have a big payoff down the line. If a couple puts $300 a month into their portfolio, the amount socked away for retirement will grow to more than $300,000 in 30 years, based on a 6% average annualized return.

    But first, time to have that talk -- and be as open with each other about your retirement picture as you are with your stock broker.

    Kevin Voigt is a staff writer at NerdWallet, a personal finance website. Email: kevin@nerdwallet.com. Twitter: @kevinvoigt.

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